{"ok":true,"canonical_url":"https://dealroom.so/glossary/eligibility-error","api_url":"https://dealroom.so/api/public/glossary/eligibility-error","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"eligibility-error","term":"Eligibility Error","group":"The loan itself","definition":"This happens when a borrower or business doesn't meet SBA's specific criteria for a 7(a) loan, often discovered after closing. It can cause the SBA to deny its guaranty.","what_it_means":"If the SBA finds out after your loan funds that you or the business were ineligible from the start, they can deny the guaranty to the lender. This puts the lender at full risk and can lead to them demanding immediate repayment. A thorough lender's underwriting process aims to prevent this.","url":"https://dealroom.so/glossary/eligibility-error","official_sources":[{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"},{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"sba-loan-program-requirements","term":"SBA Loan Program Requirements","url":"https://dealroom.so/glossary/sba-loan-program-requirements"},{"slug":"underwriting","term":"Underwriting","url":"https://dealroom.so/glossary/underwriting"},{"slug":"guaranty-purchase-request","term":"Guaranty purchase request","url":"https://dealroom.so/glossary/guaranty-purchase-request"},{"slug":"ineligible-businesses-rule","term":"Ineligible businesses rule","url":"https://dealroom.so/glossary/ineligible-businesses-rule"}],"related_questions":[{"question":"How does a lender correct a material error in the E-Tran submission after receiving an authorization?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-correct-a-material-error-in-the-e-tran-submission-after-receiving-an-aut"},{"question":"What specific fields in SBA Form 1919 are most critical for initial eligibility review, and what common errors lead to delays?","url":"https://dealroom.so/for-lenders/questions/what-specific-fields-in-sba-form-1919-are-most-critical-for-initial-eligibility-review-and"},{"question":"What is the process for correcting a minor error in the E-Tran system after 7(a) loan authorization?","url":"https://dealroom.so/for-lenders/questions/what-is-the-process-for-correcting-a-minor-error-in-the-e-tran-system-after-7-a-loan-autho"},{"question":"How does the SBA typically calculate the amount of guaranty honored if a repair is applied due to lender error?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-typically-calculate-the-amount-of-guaranty-honored-if-a-repair-is-applied"},{"question":"How does a lender handle an SBA decision to repair a guaranty due to a minor documentation error during UPP review?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-handle-an-sba-decision-to-repair-a-guaranty-due-to-a-minor-documentation"},{"question":"What are the consequences for a lender if a previously sold guaranteed portion of a loan defaults due to lender error?","url":"https://dealroom.so/for-lenders/questions/what-are-the-consequences-for-a-lender-if-a-previously-sold-guaranteed-portion-of-a-loan-d"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Eligibility Error","url":"https://dealroom.so/glossary/eligibility-error","source_type":"DealRoom Data"}}